SULLIVAN COUNTY, Tenn. (WJHL) – The South Fork Utility District (SFUD) has accepted the resignation of its general manager, who was at the center of an investigation by a state agency that found nearly $1.7 million in “questionable payments” to his businesses.

According to a post from the utility district, the SFUD Board of Commissioners accepted Garry Smith’s resignation and is currently accepting applications for the position.

“We are dedicated to moving forward and making SFUD the best it can be for our community,” the district wrote in the post.

In April, the Tennessee Comptroller’s Office released a report that found conflicts of interest and “questionable payments” from the utility district to Smith’s companies. Those companies, which he wholly or partly owned, received payments for more than $1.5 million of infrastructure work on SFUD lines and equipment.

The utility also has been renting office space in a building owned by Smith.

After receiving pressure from Sullivan County officials — including District Attorney General Barry Staubus’ consideration of civil action against Smith — several members of the SFUD board resigned.

Tennessee’s Utility Management Review Board (UMRB) had been building a case against the SFUD.

While the first element of the case was dismissed following the multiple resignations on the board, UMRB members continue to push for SFUD to merge with another utility. The UMRB meets Thursday and SFUD’s situation is on the agenda.

Those South Fork board members were replaced by four new commissioners, while Commissioner Jason Webb stayed on board.

New Commissioner Diann Lockner told News Channel 11 that the new make-up of the commission hopes to right the ship and regain the trust of South Fork customers.

“We definitely want to move forward and build rapport with our community and stay in communication with them,” Lockner said. “We want to address the concerns of our customers.”

Lockner said a feasibility study for a merger with a surrounding utility district has been received, and the board will consider its results over the next few months.

Meanwhile, the SFUD’s infrastructure has continued to experience issues in the past few months. Lockner said the service area has seen eight service disruptions in 2022.

Lockner said SFUD is well aware of the issues and is awaiting funding from a grant that would allow for some improvements.

Many of those experiencing outages live on or near Weaver Pike outside Bristol, according to Lockner.

Ashley Jones, who lives near Weaver Pike, said she has experienced four of those water outages in the last year.

“My neighbors, they have two small children in the house,” Jones said. “That’s a huge issue for fixing supper and giving baths and getting ready for school.”

Jones, a lifelong resident of South Fork’s service area, has lived at her current home for eight years.

She claims her water bills have more than doubled from around $30 in a two-person household to now over $70 in a three-year span.

News Channel 11 spoke with Jones prior to learning of Smith’s resignation, but she is not convinced a change in leadership would make a difference in her service.

“I think the question is will these things improve if Garry is out? I’m not sure, but it would definitely be a start,” Jones said. “There is strong evidence to support that there was mishandling of money, and in my opinion, that’s my money.”

Jones said she would rather have a new water provider over the fresh leadership at SFUD.

“I do think dissolving it is the solution,” Jones said. “Whether that is to a new entity altogether or combining two services.”

Jones also pointed out issues with communication from SFUD, calling it difficult to learn more information about the duration of outages.

Lockner said SFUD has started a new Facebook page and has brought on part-time staff to handle higher call volumes.

She also welcomed customers to attend the board’s meetings, which are held on the second Thursday of each month at 4:30 p.m. inside the SFUD office at 2800 US-421 #5 in Bristol.

“Our board meetings are published and are open to customers that would have a chance to speak at each one if they wanted to participate,” Lockner said. “We welcome feedback from the community.”

This is a developing story. News Channel 11 will provide further details online and on-air as they are received.